Auditor finds nearly $64,000 misappropriated funds by former Coyle town clerk, treasurer

Oklahoma State Auditor & Inspector Cindy Byrd today released her investigative audit report for the Town of Coyle in Logan County. The Logan County District Attorney’s office requested the State Auditor & Inspector’s Office (SA&I) to perform a forensic audit of the Town and the Coyle Public Works Authority (CPWA) transactions.

The audit uncovered that, between January 1, 2018 and December 16, 2019, Jennifer Jones, then Town Clerk/Treasurer, misappropriated $63,663.93 in Town and CWPA funds. Jones primarily misappropriated cash and checks received for utility payments and deposits, fire department dues and payments, and citation payments.

An additional $6,219.00 of questioned costs were related to unauthorized payroll payments received by both Jones and her spouse, William Jones. The Town of Coyle has an average of $301,000 in annual revenue.  The audit found 20% of annual revenues during the audit period were misappropriated.

“There is a lesson here for every town and municipality in Oklahoma,” Auditor Cindy Byrd said. “Any person entrusted with handling public money must be subjected to rigorous oversight and accountability. Every case of fraud, waste, or abuse we uncover is preventable. The State Auditor & Inspector’s office is here to help any government entity in Oklahoma build the proper safeguards to stop misappropriation before it starts.”

According to the report, four checks received by the Town totaling $2,593.88 were deposited into Jones’ personal bank account. Two checks were for utility payments.

The report states, Jones’ bank account was closed on September 26, 2018, after additional fraudulent activity was deterred by the bank when Jones attempted to deposit a check for $3,252.17 made out to the Town of Coyle. When confronted by bank personnel about the pending deposit, Jones admitted she took the check from her employer.

Jones, according to the report, misappropriated $1,720.00 using a check substitution scheme. Four fire-due checks and a portion of the Iowa Tribe casino utility payment check were used to conceal $1,720.00 of misappropriated funds.

Another finding in the case states between January 1, 2018, and December 16, 2019, Jones misappropriated over 450 utility payments totaling $49,671.05. These payments were credited to customer utility accounts but never deposited into a town bank account.

The final audit report recommends the Town of Coyle stop accepting cash as a form of payment. At a minimum, if cash continues to be accepted, the Board should conduct a monthly review of bank statements.

“Our forensic audit team worked tirelessly and deserves the credit for uncovering the problems in Coyle,” Auditor Byrd said. “However, our work would not have been possible if not for a former CPA serving on the Town of Coyle Board of Trustees who discovered these irregularities. She is an example of how leaders should be vigilant in their oversight of spending.”

In May 2019, a town trustee, completed a payroll review and determined that excess payroll payments had been made to Jones and her spouse, William (Casey) Jones, who at that time was also a town employee. Jones informed town council members that she did not reconcile her personal bank account and did not notice the duplicate payments in her account.

The trustees decided that the ten additional payments could possibly be due to human error. When the payroll overpayment was discovered, the council was unaware of Jones’ other misappropriations and gave her the benefit of the doubt. At this point, Jones was relieved of her payroll duties.

The Jones’ signed an agreement to repay the money by automatic payroll deduction. The agreement stated, “Should our employment be terminated with the Town of Coyle/CPWA the amounts owing will immediately become due unless other payment arrangements are made and accepted by the Town/CPWA trustees.”

Restitution payments commenced in August 2019 and ended when the Jones’ were terminated, William Jones in September 2019 and Jennifer Jones in December 2019. The extra payroll payments made to the Jones’ totaled $6,219.00.11. At the time Jones was terminated, the Town had received $2,510.00 in restitution, leaving $1,464.00 owed by Jones and $2,245.00 owed by William Jones. Contrary to the agreement signed, none of the remaining $3,709.00 owed to the Town has been repaid.

The final audit report has been handed over to the Oklahoma State Bureau of Investigation and the District Attorney’s office.


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